Protein sequences deduced from gene sequences of diverse bacteria and archaebacteria are yielding a wealth of new knowledge on protein functions, interactions and evolution. A number of unexpected novelties were studied by concerted methods including directed mutagenesis, spectroscopic/enzymological analyses and computer analyses of sequence databases. Findings include:- A. Bacterial homologs of major "eukaryotic" protein families. The antiquity of Serine/Threonine protein kinases was confirmed by discovery of protein kinase C homologs in cyanobacteria and archaebacteria, in addition to those already known to be involved in cellular differentiation in Myxococcus. TPR repeats characteristic of many cell cycle proteins in eukaryotes were found in different cyanobacteria and Yersinia enterocolitica. B. Distinct bacterial and eukaryotic molybdoproteins. At the sequence level, two completely distinct, strongly conserved families of pterin-molybdenum cofactor enzymes perform the same hydroxylation and redox reactions in (a) archaebacteria plus eubacteria and (b) eukaryotes. Sequence features were correlated with protein spectroscopic properties and domain organization. C. Sequence families in complex bacteria. Available sequences from multicellular and differentiating bacteria, Streptomyces, Myxococcus and various cyanobacteria and archaebacteria, were classified by global database sequence similarity searches. More than 50 percent of the classifiable protein sequences did not have counterparts in E. coli and other well-studied enteric bacteria, and many of these had eukaryotic homologs. Significance of project: Genome sequences from metabolically and morphogenetically diverse bacteria provide a rich and cost-effective source of new discoveries on the molecular functions and evolution of proteins.